R (on the application of Prudential plc and another) v Special Commissioner of Income Tax

Privilege – Lawyers Only

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The Supreme Court has given judgment in a long awaited case on whether or not legal advice given by accountants is privileged. The case is R (on the application of Prudential plc and another) (Appellants) v Special Commissioner of Income Tax and another (Respondents) [2013] UKSC 1.

As well as the parties, the taxpayer and Her Majesty’s Revenue and Customs, other interested parties intervened. The Interveners were The Law Society of England and Wales, The General Council of the Bar of England and Wales, The Institute of Chartered Accountants of England and Wales, AIPPI UK Group, and the Legal Services Board.

Although the law on the ambit of privilege is not entirely clear in certain circumstances, this case makes it absolutely clear that, if there is legal advice privilege, it only arises in relation to communications between a client and its lawyers. Even though accountants give legal advice on tax matters (as do other professionals such as actuaries, auditors, architects and surveyors in different fields), communications with accountants are not covered by legal advice privilege.

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